Moody’s changes MTN’s outlook to stable

Rating agency Moody’s has changed the outlook of Africa’s telecoms giant MTN Group to stable from positive.

The telecoms operator’s issuer rating was also affirmed to Baa2 and national scale rating at A1.za, Moody’s noted in statement December 13, 2013.

“… change in outlook to stable from positive predominately reflects MTN’s increasing exposure to riskier markets which is tempering any possible upward rating pressure, despite MTN’s strong and stable consolidated credit metrics over the past few years,” said Dion Bate, Vice president- Senior Analyst.

The agency explains that MTN’s exposure to the risks within the political, social, regulatory and economic environments in the key countries in which it operates such as South Africa (Baa1/negative) and Nigeria (Ba3/stable) are important drivers for MTN’s ratings(Baa2/stable).

Moody’s is predicting that MTN’s rating is unlikely to be upgraded to Baa1, particularly “given our expectation of stronger growth opportunities in markets outside of South Africa”.

MTN has operations in 22 African and Middle Eastern countries with a total subscriber base of 203.7 million, as of September 30, 2013.

By EkowQuandzie